Why Does It Take so Long for My Loan to Close?

You’ve made the offer on a house that’s just perfect for you. The seller has accepted it, and now you just can’t wait to get the keys. So why is it taking 30 days to close this loan?

Here at Quicken Loans, we have a mission to make your mortgage process as simple as possible. Nevertheless, there are a lot of moving pieces along the way. Sometimes things take just a little bit longer than one might think.

We’ll go over some of the pain points, but there are also things you can do to smooth out the bumps in the mortgage road.

Documentation

One of the biggest things you can do to help your mortgage process along is to have your documentation ready up front.

There’s some basic documentation that’s pretty common with most mortgage processes. Here’s a list that I like to think of as the terrific trio of mortgage documents:

Two years’ worth of W-2s

Two years’ worth of tax returns

Two months’ worth of bank statements

These are very important for showing your income. Now, if you own 25% or more of a business, you’re considered self-employed, which comes with its own set of documents. And if you’re retired, your income would be documented through items like award letters and 1099s.

In addition to income, you also need to document any assets – whether these are used for your down payment or to pay off outstanding debt – that you want to liquidate in qualifying for the mortgage. This would typically be documented through statements.

Your lender will also need to verify any large deposits they see in your account that aren’t supported by your income documents. What qualifies as a large deposit depends on the type of loan you’re getting, but it’s within the underwriter’s discretion to ask about any deposit.

If any of your documents are mailed to a different address than the one you reported to the lender, a letter of explanation, and possibly additional documentation, will be required to verify your application is accurate.

Special Situations

The documents listed above are the basics, but there are many situations in which an underwriter would need to see more information from you.

Ron O’Connor, a divisional vice president at Quicken Loans, took us through some of the bigger documentation reasons that cause a loan process to be delayed.

“Some clients have specific situations such as past bankruptcies, foreclosures, previous judgments, old tax liens or divorces,” he said. “Having the documents related to these events on hand is important, as we may be requesting them through your loan process.”

If you have any collections or things showing up on your credit report that have already been taken care of, your lender may also request documentation on those as well.

If you’re receiving the down payment as a gift, you’ll be asked to provide a gift letter as well as evidence of withdrawal and deposit. If it’s an FHA loan, the donor will also have to provide a bank statement showing the funds have been in their account for at least 30 days.

Finally, if you’re a veteran, active-duty service member or surviving spouse qualifying for a VA loan, you’ll need to show your certificate of eligibility.

These are common documents that may be necessary. There may be other items that come up depending on your situation and the type of loan you’re applying for. The most important thing to remember is to get your documentation in as quickly as possible in order to expedite your loan process.

Appraisals

Another reason for a delay in your mortgage process is the appraisal. A common misconception is that the lender performs the home appraisal, but this isn’t true. In reality, appraisals must be completed by a disinterested third party.

The good news is these independent appraisers are experts in their field: They have to pass an examination and work as an apprentice, which requires about two years of work in the field. They also must have a four-year college degree. There’s a shortage of appraisers in some areas right now, particularly in rural areas of Oregon, Colorado and Washington.

After the appraisal and home inspection are complete, the house may need repairs made to it before you can move in, which might delay your closing date.

If the appraisal comes in lower than your offer, you have a few options. You can renegotiate with the seller to buy the home for the appraisal price. This could take a few days. You might also consider bringing the price difference in cash to the closing table.

A third option is to work with your lender to appeal the appraisal. If you can find comparable properties in your area, you may be able to get a higher valuation on appeal, saving you money in the long run. However, this will delay your time to close on your new house.

Title Issues

One of the other big things that causes closing delays is title problems. If there is a judgment or any other kind of lien on the property, it’s helpful to know about that up front in order to help you close the loan in a timely manner.

If the property is in a trust, sometimes it needs to be taken out; in other cases, liens on the house have to be reworked so that they take second priority to the mortgage.

We definitely aim to get your loan closed as fast as possible. The real key throughout the process is efficient communication, and we’ll be with you every step of the way. You can always reach out to a Home Loan Expert before you put an offer in on a home so you know what documentation might be needed ahead of time to avoid surprises.

If you think you’re ready to move forward, you can get in touch with one of our Home Loan Experts or call (888) 728-4702. If you have any questions, feel free to leave them for us in the comments below.

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This Post Has 10 Comments

I am shopping for a no or low cost cash out refinance that will accept bad to fair credit and no need for income verif needed. I have a mortgage of $130,000 and the value was just appraised the middle of May 2018 at $634,000. My credit score is 583, maybe higher now. I
need to lower payment and take out about $400,000 cash and lower interest rate with a fixed rate if possible. I am looking for a very fast loan process that whole loan approval to funding state takes under 30 days if possible. I have a hard money loan and am looking for a low fixed rate 30yr term. my payment currently is $2045.00 interest only at 10% payments for 2 years then a baloon payment of $130,000 at end of 2 yrs which is June 1, 2020 it will be due.

please email me first any information you have that may possibly help my situation so I can review it before I decide what way to go.
Thank you for your time and consideration.

I have gone ahead and removed your personal information from this public forum.

We don’t do no income verification loans. One, there are strict regulations against that in today’s mortgage industry. More importantly though, we want to make very sure that we are giving you a loan you can handle. Therefore, we would verify both your income and any existing monthly debt payments you have along with employment and a number of other factors.

While we can’t guarantee anything because every situation is different, typically, the refinance process takes as little as a few weeks. We can certainly help you look into your options for a fixed-rate loan. If you would like to go over your options, you can do so online through Rocket Mortgage or by calling one of our Home Loan Experts at (888) 980-6716. Have a good day!

Rocket Loans….. huge nightmare. Underwriters never have enough information. This is by NO way a fast process. I would never do this process again…ever. The best way to buy a house is to go to a small , local bank, or save money and pay cash. Luckily, I Have a house I live in that is paid for and was looking for a second home. Not worth the hassle. RUN!

We never want to hear one of our clients has had an experience like this. I’m going to get this to our Client Relations team to see if we can get this turned around for you. Thanks for reaching out and giving us the opportunity to help.

I’m having issues with my gift letter my Loan Officer told me to play it safe and write a gift letter for a few thousand more just incase I might need a little more for closing(He said” it shouldn’t be a problem”) now that the gift clear in my account and they see its for three thousand less then the Original gift amount written in the letter I’m having issues..Now the “Executive Purchase Specialist” says it might or might not be a problem so i’m going to have to speak with underwriting to see if its okay…A day passes by I email her to ask if she has heard from underwriting ..replies back “Unfortunately it takes 48 hours to hear back” no problem respond back two days later(which makes it three days from when we had the issue ..no response…now its one week later ..still no response .. its sad how when the customer is the one with the issue very fast to harass and call them multiple times but when its time to reassure the customer we are working on it ..no where to be found… this is so upsetting I pay $1050 to break my lease with my current apartment and I have to be out by June 30th and its about to be June1st and you guys can’t even tell me if were going to close atleast by the 23rd so we can have enough time to move…So now both parties are sitting here waiting for Quicken to give the okay to close…Time to start searching for other lenders that can close before I end up homeless.

I feel the same way however in my case they want my money in my checking to be the same as my savings. With this being said, my loan officer says they need me to have a buffer in my accounts and keep depositing my paychecks. They put off my closing for a longer time frame and think that I am to hold that money for two more weeks.
Personally I feel that underwriters have unrealistic expectations and are destined to set you up to fail in all your other financial obligations.
Like I guess I need to not pay my car payment or feed my family or put gas in my car to get to and from work, etc… all while my money is in my account where I was told to keep putting it in and not spend it.
So lets not make a car payment and show the underwriters that we are not being responsible in paying the debts we currently have? This makes absolutely no sense at all.
I think they should have a time limit to get the approval accepted or denied. We have to stop what we are doing and get what they need ASAP! but they don’t have to do their part in return.
By all means, this has no reflection on my loan officer as they are doing all they can as well as me, but the underwriters can take all the time in the world.
Bad enough on us that our landlord failed to pay the mortgage and home sold in an auction and we are left to turn around and get out ASAP. With all that I am having to prove that since the home we were renting went into foreclosure, that I was not at fault and paid on time. They look at me like it went into foreclosure because we failed to pay? No, go back and do your job and read my bank statements where it shows I paid.
Underwriters look at us as the bad guys in this situation and in reality, you want to see if I can afford to buy a home? Lets take a better look, I am current in all my bills, I am raising an autistic kid and two step kids, a husband who has to stay home with two unruly teens, I pay all the bills and pay the Ex to “Help the babies mama” so she has money to do things with the kids, oh yeah, I can afford a house because to top it off it all, I was supporting my landlord!
Time for underwriters to do their job in a more timely and fashionable manor as they expect from us. It’s already been well over a month since we put or offer in and they accepted it.

We say that because we can’t get into people’s personal financial situations in the blog comments, but we do look into their situation and reach out. We try to treat your information the way we would want our information to be treated. I’m going to pass this along to see if there’s a specific issue we can help you with.